Fraud Alert: Be careful with text messages asking you to verify fraudulent transactions. Learn More >

Find answers to our Frequently Asked Questions.
* indicates a required field.
Posted April 12, 2019

At the ripe age of 18, you decide what career path you want to take, choose whether you’ll attend college, decide if you want to begin borrowing, and will have the responsibility of managing your money.

There isn’t always someone there to teach us about financial concepts, but we hope this article will encourage you to learn more, ask questions, and better prepare for what’s ahead.

Saving and setting goals

According to a recent Bankrate Survey, 20% of Americans aren’t saving any money. Respondents cited high life expenses and a crummy job as reasons why, but not saving makes you financially vulnerable. If you have little to no savings, you’re putting yourself in a difficult place both financially and emotionally.

No matter how much you earn, you may never feel you earn enough to save but it’s absolutely necessary. Aim to set money aside before anything else. Save for unexpected expenses, your education, a car, a home, or for other goals. Money saved will earn dividends and will be easily accessible should you need it.

Managing money

To be able to save, you first have to have a sensible budget. Take time to review your income and expenses. Often times, you don’t know exactly what you earn or where your money is going until you take a closer look.

Once you have an idea of how much you earn and spend, you can plan for what you want to spend on different items or categories moving forward. Here’s where you can shift money around to ensure you’re contributing enough to an emergency fund and other financial goals. The key is to stick with it.

Building credit

Imagine you have two friends who ask to borrow money from you. One has paid you back before and you’ve never loaned money to the other. Which of the two would you lend money to? The answer is likely the person who not only has history but who has positive history of paying you back.

Though you may not need credit now, there will likely come a time when you do. For this reason, you want to establish credit and build positive credit history. Your chances of being approved for future loans and on better terms increases. Click here for additional articles on understanding credit.

Understanding credit cards

Soon you will begin getting credit card offers. A credit card can be a great tool for building credit or it can be your worst nightmare. It all comes down to using credit responsibly. Know that a credit card is not a gift card and everything you charge must be paid back.

If you pay your statement in full, you can build credit, earn rewards, and pay zero interest. If you pay any less, you’ll be charged interest for borrowing. This can be very expensive, so it’s important to charge only what you can afford. Use your credit card to pay for gas, food, or other items you already pay for and fit within your budget.

The value of money

If you’ve depended on a parent or guardian until now, you likely don’t fully understand how much things cost. Pay attention. While living on your own may not be in your immediate plans, it’s still a good idea to have an understanding of the income needed to support yourself.

Your teenage years are also a great time to begin exploring different career paths. What will be required? What’s the outlook for a particular job? What’s the projected pay? You want to make sure that if you invest time, resources, and money, it will pay off one day.

 

Visit aplusfcu.org/balance to gain access to free resources covering a wide variety of topics, including Teens and Money.